Overview
The Standard Interpretations Committee (SIC), later renamed the International Financial Reporting Interpretations Committee (IFRIC), was formed by the International Accounting Standards Committee (IASC). The SIC was tasked with issuing authoritative interpretations on International Financial Reporting Standards (IFRS). These interpretations aimed to ensure consistent and accurate application of IFRS across different jurisdictions, thereby enhancing global financial reporting.
Examples
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SIC-32 (Intangible Assets—Web Site Costs): This interpretation provided guidance on the accounting for costs incurred in developing, enhancing, and maintaining a website. It clarified that such costs should be recognized as an intangible asset when specific criteria are met.
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SIC-12 (Consolidation—Special Purpose Entities): SIC-12 provided guidance on the consolidation of special purpose entities (SPEs). It required entities to consolidate SPEs when they are controlled by the entity, despite not holding majority voting rights.
Frequently Asked Questions
What was the role of the SIC?
The SIC was responsible for interpreting the application of IFRS to ensure uniformity in financial reporting practices across different entities and jurisdictions.
When was the SIC renamed to IFRIC?
The Standard Interpretations Committee (SIC) was renamed to the International Financial Reporting Interpretations Committee (IFRIC) in 2002.
Why are SIC interpretations important?
SIC interpretations provide clarity and guidance on complex IFRS standards, ensuring that companies apply these standards consistently, which enhances comparability and reliability in financial statements.
Can SIC interpretations still be used?
While many SIC interpretations have been absorbed into IFRIC interpretations, they can still be referred to for historical financial reporting contexts. However, they must be checked for updates with current IFRIC guidance.
Who succeeded the SIC?
The SIC was succeeded by the International Financial Reporting Interpretations Committee (IFRIC) in 2002, which continues the role of issuing interpretative guidance on IFRS.
Related Terms
- International Financial Reporting Standards (IFRS): Global standards for financial reporting developed by the International Accounting Standards Board (IASB).
- International Financial Reporting Interpretations Committee (IFRIC): The body that succeeded the SIC, responsible for issuing authoritative interpretations of IFRS.
- International Accounting Standards Committee (IASC): The body that developed international accounting standards before being replaced by the IASB.
Online Resources
- IFRS Foundation - Official site providing comprehensive information on IFRS standards and interpretations.
- IASB (International Accounting Standards Board) - The organization responsible for developing and promoting IFRS.
Suggested Books for Further Studies
- “Wiley IFRS 2021: Interpretation and Application of IFRS Standards” by PKF International Ltd.
- “IFRS: A Quick Reference Guide” by Robert J. Kirk.
- “International Financial Statement Analysis” by Thomas R. Robinson et al.
Accounting Basics: “Standard Interpretations Committee (SIC)” Fundamentals Quiz
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